AIR INDIA ASSETS HOLDING LTD. (AIAHL)

About: 

• The SPV will be called Air India Assets Holding Ltd. (AIAHL) and will house ₹29,646 crore debt of Air India, which is more than half of the total debt of ₹55,000 crore. 
  
  
• Subsidiaries: It will also house four subsidiaries of Air India — 
  • Air India Air Transport Services Ltd. (AIATSL), 
    
    
  • Airline Allied Services Ltd. (AASL), 
    
    
  • Air India Engineering Services Ltd. (AIESL) and 
    
    
  • Hotel Corporation of India Ltd. (HCI). 
    
    
  
  
  
• Mandate: 
  • The SPV will house ₹29,646 crore debt of Air India, which is more than half of the total debt of ₹55,000 crore. The non-core assets, paintings and artefacts will also be moved into the SPV. 
    
    
  • The transfer of the debt is expected to help the carrier save costs on servicing the huge debt The airline pays nearly ₹4,500 crore per annum as interest on its total debt. 
    
    
  • The disinvestment proceeds will be utilized to set off the working capital loan liability of Air India not backed by any asset also warehoused in the same SPV. 
    
    
  
  
  
• Background: Ministry of Civil Aviation (MoCA) issued order for creation of a new SPV. The SPV, Air India Assets Holding Ltd. was incorporated on 22nd January 2018. 
  
  
• Composition: The Board of Directors of SPV includes CMD, Air India Ltd. and Joint Secretaries of MoCA, Deptt. of Expenditure, Deptt. of Economic Affairs, DIPAM and Director(Finance) Air India Ltd. 
  
  
• Present status: As on date, one subsidiary, namely AIATSL has been transferred to AIAHL, as per the Share Purchase Agreement between Air India Ltd. and AIAHL subject to conditions precedents which include lenders’ approval.